Saudi Arabia aims to introduce a value-added tax (VAT) refund system for tourists in 2025, as outlined in the Saudi budget statement for the upcoming fiscal year. The Zakat, Tax, and Customs Authority will oversee the implementation of the system, which seeks to streamline tax compliance and enhance the travel experience for visitors.
The VAT refund system for tourists highlights Saudi Arabia’s dedication to meeting its Vision 2030 goals and attracting additional tourists in a bid to divert its economy from reliance on oil.
Tourism targets for 2025
In addition to implementing the VAT refund system for tourists, Saudi Arabia’s budget statement also outlined key tourism targets for 2025 including attracting 127 million visitors to support the goals of the National Tourism Strategy. The strategy promotes both domestic and international tourism, reinforcing the Kingdom’s position as a global destination of choice, and supporting it in achieving the targets of Vision 2030.
For 2025, Saudi Arabia also aims to raise tourism spending to SAR346.6 billion, which directly contributes to the national economy, increases non-oil resources, and supports the private sector by providing higher demand.
Saudi Arabia also aims to create 1.17 million jobs in tourism next year by fostering growth in the sector. This will contribute to reducing unemployment and creating new jobs and career paths in the labor market.
In its budget, Saudi Arabia allocated SAR87 billion for the economic resources sector. This includes commerce and business services, environmental transformation, energy and water resources, and mineral and industrial wealth. Moreover, it includes developing tourism businesses and international strategic partnerships, among others.
Read: Saudi Arabia sees 27 percent surge in incoming tourists over 9 months, says tourism minister
Key 2024 achievements
In 2024, the Ministry of Tourism reported attracting 59.74 million local and international tourists by June. This figure supports private sector growth and contributes to the rise in non-oil revenues within the GDP. By the end of 2024, Saudi Arabia aims to reach 119.6 million tourists, further advancing its tourism ambitions.
The tourism sector has also seen substantial investment in 2024, with SAR8 billion secured by August. This figure is expected to rise to SAR15 billion by the end of the year, highlighting the sector’s role in driving economic diversification.
In addition, tourism spending reached SAR156.6 billion by mid-2024, contributing directly to the domestic economy and supporting the private sector. The Kingdom aims to achieve SAR304 billion in total tourism spending by the end of 2024.
The budget statement added that the Saudi Summer Program 2024 was a success, attracting 6.9 million visitors and SAR10.5 billion in spending. This year, the Kingdom doubled down on its efforts to attract additional tourists by participating in global events like Arabian Travel Market in Dubai and IBT in Berlin.
In addition, it engaged with 1,025 trade partners at these events, further positioning itself as a global tourism hub. The budget statement estimates that these engagements and events attracted around 4.1 million visitors and SAR21.9 billion in spending.
